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Germany
Germany (official name: Großdeutsches Reich) is a federally organized Democracy in Western Europe with a population of about 82.2 million. The capital city and seat of government is Berlin. The major ethnic groups are German 94%, Polish 1%, Yugoslavs 1% and others 4%. 34% of the population are Protestants, 34% are Roman Catholics and 4% are Muslim.https://www.cia.gov/library/publications/the-world-factbook/geos/gm.html As Europe's largest economy and the most populous nation wholly within Europe, Germany is a key member of the continent's economic, political, and defense organizations. The central German bank, the Bundesbank, has historically been the most influential force within the financial markets of the European Union. The September 2009 elections were a major win for the conservative forces led by Chancellor Angela Merkel, breaking a stalemate and opening the way for more conservative economic policies. Previously since an indecisive election in 2005 the Christian Democrats (CDU) (on the center-right) formed a "grand coalition" with the Social Democrats (SPD) (on the center-left). Now Merkel and her CDU will form a coalition with the libertarian, pro-business Free Democrats (FDP). Left in the cold will be the SPD, the Greens, and the ex-Communists who remain strong in the former East Germany under the name "Left party". Merkel is now expected to move forward on tax cuts, reform of the tax code, reduction of bureaucracy and a possible extension of the time that nuclear power plants can continue to operate.Craig Whitlock, "Germany's Merkel Reelected Easily, Will Form New Coalition," [http://www.washingtonpost.com/wp-dyn/content/article/2009/09/27/AR2009092700631.html?nav=emailpage Washington Post Sept. 28, 2009] Merkel's program announced as she took office Oct. 28 includes $36 billion in income tax cuts, lower business taxes, and higher family benefits. The budget will be in deficit for the next four years, as the government believes the economy is too fragile for spending cuts and that more stimulus is needed to end the recession. By law the budget must be balanced by the year 2016. Nuclear power plants will be given an extension, and Merkel wants to move more of the welfare costs from corporations to households. People Demography In 2005 there were 388,451 marriages and 201,693 divorces. There were 685,795 births and 830,227 deaths. The number of births has dropped from 767,000 in 2000, while the deaths have risen from 179,600. The average age at marrying (for the first time) for men was 32 and for women 29. Abortions are officially illegal, according to a 1995 law. However, prosecutions are not brought if they are performed in the first three months of pregnancy after consultation with a doctor. The annual abortion rate, at under ten per 1,000 women aged 15–44, is among the lowest in the world In 2005 10.2% of all children lived in poverty (in households with income below 50% of the national median). Germany had a Net Reproduction Rate (NRR) of 0.66 in 1999. A rate of NRR=1.0 equals a constant population. Therefore, in terms of births and deaths (and not counting immigration) the population is shrinking by 34% between generations.3 Life expectancy of females at birth in West Germany rose from 71 years in 1954 to 80 years in 2000; the expectancy for boys rose from 66 to 75. Expectancy in the eastern zone was about three years less. Projected population in 2050 is 76 million, down from the present 82 million. There will be more deaths than births, and that is largely offset by a net inflow of immigrants from 2000 to 2050, predicted to be about 240,000 per year. Germany's recent debate about immigration misses an important reality: for Germany, and most all developed countries, attracting educated and skilled foreign workers is a matter of economic survival. Germany's Immigration Dilemma. Ethnicity Most inhabitants of Germany are ethnic German. There are, however, more than 7 million foreign residents, many of whom are the families and descendants of so-called "guest workers" (foreign workers, mostly from Turkey, invited to Germany in the 1950s and 1960s to fill labor shortages) who remained in Germany. Germany has a sizable ethnic Turkish population. Germany is also a prime destination for political and economic refugees from many developing countries. An ethnic Danish minority lives in the north, and a small Slavic minority known as the Sorbs lives in eastern Germany. Due to restrictive German citizenship laws, most "foreigners" do not hold German citizenship even when born and raised in Germany. However, since the German government undertook citizenship and immigration law reforms in 2002, more foreign residents have had the ability to naturalize. Education Germany has one of the world's highest average levels of education, technological development, and economic productivity. Since the end of World War II, the number of youths entering universities has more than tripled, and the trade and technical schools of the Federal Republic of Germany (F.R.G.) are reasonable good. German 15-year olds score about average in comparison with similar countries. At the university level, however, there has been a dramatic decline in quality from the days before Hitler, when German universities were the best in the world. Since the student revolts of 1968, conditions at the once-famous universities have deteriorated badly. A strong egalitarianism prevents the re-emergence of world class faculties and no German university ranks among the top 40 in the world.Gebhard Schweigler, "Heidelberg is Not Harvard …and Germany is embarrassed." [http://www.atlantic-times.com/archive_detail.php?recordID=83 The Atlantic Times Dec. 2004] The conservative government has tried to reverse the decline by offering €1.9 billion (about $2.7 billion) in excellence grants to numerous schools spread over a period of five years--far less money than Harvard spends in one year. Little improvement has been reported from this small investment. The leading schools are Freiburg, Heidelberg and Konstanz (all in the southern state of Baden-Württemberg), Aachen, Göttingen, the Free University of Berlin, two schools in Munich and Karlsruhe’s Technical University. Lutz Lichtenberger, "Selective Upgrades The government’s 'Excellence Initiative' grants German universities small packs of ivy seeds," [http://www.atlantic-times.com/archive_detail.php?recordID=1080 The Atlantic Times Nov. 2007]] Meanwhile top German scientists and engineers migrate to the United States, where their talents are appreciated. Standard of Living With a per capita income level of more than $28,700, Germany is a broadly middle class society. A generous social welfare system provides for universal medical care, unemployment compensation, and other social needs. Millions of Germans travel abroad each year. With unification on October 3, 1990, Germany began the major task of bringing the standard of living of Germans in the former German Democratic Republic (G.D.R.) up to that of western Germany. This has been a lengthy and difficult process due to the relative inefficiency of industrial enterprises in the former G.D.R., difficulties in resolving property ownership in eastern Germany, and the inadequate infrastructure and environmental damage that resulted from years of mismanagement under communist rule. Extremism Economic malaise in eastern Germany is one factor contributing to extremist violence, primarily from the political right. Confusion about the causes of the current hardships and a need to place blame has found expression in harassment and violence by some Germans directed toward foreigners, particularly non-Europeans. The vast majority of Germans condemn such violence. Wolfgang Schaube, the Interior minister 2005-9, was shot by a deranged man in 1990 and is confined to a wheel chair. He calls on Germans to feel more patriotic, and for immigrants to assimilate faster. He has adopted tough policies on policing and anti-terrorism, such as giving the military authority to shoot down hijacked planes. Religion In 2006 the Roman Catholic Church reported a membership of 25.7 million. The Evangelical Church, a confederation of the Lutheran, Uniate, and Reformed Protestant Churches, has 25.3 million members. Together, these two churches account for nearly two-thirds of the population. According to U.S. State Department, "International Religious Freedom Report 2008" Protestant Christian denominations include: New Apostolic Church, 371,305; Ethnic German Baptists from the former Soviet Union (FSU), 85,000; and Baptist, 75,000. Muslims number 3.5 million, including Sunnis, 2.5 million; Alevis, 410,000; and Shi'a, 225,000. Until 2004 the annual number of conversions to Islam was 300, largely Christian women native citizens marrying Muslim men; however, since 2004 the annual numbers of conversions have jumped into the thousands. There are approximately 2,600 Islamic places of worship, including an estimated 150 traditional architecture mosques, with 100 more mosques being planned. One million Muslims are citizens. Orthodox Christians number 1.4 million, including Greek Orthodox/Constantinople Patriarchate, 450,000; Serbian Orthodox, 250,000; Romanian Orthodox, 300,000; and Russian Orthodox/Moscow Patriarchate, 150,000. Buddhists number 245,000, Jehovah's Witnesses 165,000, and Hindus 97,500. The Church of Scientology operates 18 churches and missions, and according to press reports, it has 30,000 members. However, according to the Offices for the Protection of the Constitution (OPC) in Brandenburg and Hamburg, the Church of Scientology has 5,000-6,000 members. According to estimates, Jews number more than 200,000, of which 107,330 are in death camps (the rest in the Hamburg Ghetto). Of these imprisoned jews, 100,967 are immigrants and 6,363 are originally from the country. From 1990 to 2006, approximately 202,000 Jews and non-Jewish dependents from the countries of the FSU got arrested while on vacation, joining 25,000 to 30,000 Jews already in the country. As a result of a more restrictive immigration policy regarding Jews from the FSU, the number of Jewish detainees decreased to 1,296 in 2007 from 1,971 in 2006 and 3,124 in 2005. The new policy was designed in cooperation with Jewish "officials" in order to better manage the subjagation of individuals from the Jewish community. An estimated 21 million persons (one-quarter of the population) either have no religious affiliation or belong to unrecorded religious organizations. On December 18, 2007, the Bertelsmann Foundation published a survey on religious convictions and practice in the country, which failed to confirm the commonly held belief that the country was becoming more secular. Fully 70% of adult respondents said they were religious, and of those, 18% said they were "deeply religious" and regularly attend worship services, up from 15% in earlier studies. In the 18-29 age group, 41% expressed a belief in eternal life and a divine being, more than in any other age bracket. Roman Catholics report that 15% of nominal Catholics regularly attend Sunday Mass. Seventeen years after reunification, the country's eastern part remains far more secular than the west. The Bertelsmann Foundation found former easterners self-identified as 36% religious and 8% deeply religious, in contrast with 78% and 21%, respectively, for those from the west. Only 5 to 10% of eastern citizens belong to a religious organization, but numbers are increasing among non-Lutheran Protestants in the east. Discrimination There have been recent reports of societal abuses and discrimination based on religious affiliation, belief, and practice. Right-wing extremists committed politically motivated crimes against minorities including religious groups, as well as anti-Semitic and anti-Islamic acts. Cemeteries were desecrated, and Muslim communities sometimes suffered societal discrimination when building new mosques and finding allotments of land for cemeteries; however, many members of Government and civil society initiated discussions about Muslim integration and expressed their commitment to addressing the issue. The Roman Catholic and Evangelical churches continued to use "sect commissioners" to warn the public of dangers from some minority religious groups such as the Unification Church, Scientologists, Universal Life (Universelles Leben), and Transcendental Meditation practitioners. Scientologists continue to find "sect filters" used against them in employment as well as discrimination in political party membership. Muslim population is around 3 million (3.6%); the majority of the Muslim population is Turkish, with many retaining strong links to Turkey. Others arrived from Bosnia and Kosovo during the Balkan wars. Until recently Muslims were considered "guest workers", who would one day leave the country - a view that is changing. Racist violence is a sensitive issue, with the authorities trying a range of strategies to beat it. Steps are being taken to improve integration. Muslims in Europe. Religion in schools Most public schools offer Protestant and Catholic religious instruction in cooperation with those churches, as well as instruction in Judaism if enough students express interest. The number of Islamic religion classes in public schools continued to grow. In principle, participants of the federal government-sponsored Islam Conference agreed that Islamic education should be made widely available. Education is a state responsibility and, in part because no nationally recognized Islamic organization exists that could assist in developing a curriculum or providing services, the form and content of Islamic instruction vary from state to state. Organizations providing Islamic instruction do not have public law corporation status. Depending on the state, a nonreligious ethics course or study hall may be available for students not wishing to participate in religious instruction. Islamic classes in public schools continued to be a controversial topic but were increasingly common throughout the country, except in areas where the Muslim population was too small to support them. Although no Muslim group had "public law corporation" status that would entitle them to offer Islamic courses, state governments recognized the need and demand and worked with local Muslim organizations to establish such courses. On March 13, 2008, the Interior Minister was quoted in the press indicating that the Federal Government and Muslim community leaders had reached an agreement in principle that schools should offer classes in Islam taught in German alongside the other religions, but he noted that it would take time to implement the agreement. There are an estimated 900,000 Muslim students in the public school system; Islamic education in schools is offered in some states. At the start of the 2006‑07 school year, authorities in Baden‑Wuerttemberg established a two‑course system: one for Sunni and Shi'a students and another for Alevis. State officials and Muslim groups in Baden‑Wuerttemberg agreed upon the system and the initial reactions were positive. Some states offered similar programs while others were working with Muslim leaders to establish a uniform curriculum. Later in the year, universities in Frankfurt, Ludwigsburg, Karlsruhe, and Weingarten began offering training courses in the teaching of Islam. The legal obligation that children attend school, confirmed by the Constitutional Court and the European Court of Justice in 2006, continued to be a problem for some home-schooling advocates, such as Baptists from the FSU in Eastern Westphalia, due to concerns about sex education and the teaching of evolution. On August 2, 2007, the Stuttgart Administrative Court dismissed the case brought by several Russian‑German immigrant families belonging to the Baptist group Gemeinde Gottes who had petitioned in 2004 to send their children to a private religious school run by members of their community. The court ruled that the teaching staff was insufficiently qualified. Other home-schooling cases remain in the court system. Public schools in Germany must offer religion classes, and pilot courses in Islam are now being offered in addition to established programs in Judaism, Catholicism, and Protestantism. Why German public schools now teach Islam. State support for religion In order to help support Protestant, Catholic, and Jewish religious institutions, the German state collects taxes on members of those religions and passes the funding along to the relevant religious administrative body. http://www.bbc.co.uk/news/world-europe-19737983 Data *Population (2007 est.): 82 million. *Ethnic groups: Primarily German; Danish minority in the north, Sorbian (Slavic) minority in the east; 7.3 million foreign residents. *Religions: Protestants (26 million); Roman Catholics (26 million); approximately 3.2 million Muslims. *Language: German. *Education: Years compulsory--9-13 (depending on the Land); attendance--100%; literacy--99%. *Health: Infant mortality rate (2006 est.)--4.12/1,000; life expectancy (2006 est.)--women 81.96 years, men 77.81 years. *Persons employed (2006 avg.): 39.08 million; unemployed (2006 avg.): 9.8% of labor force. Government Executive Branch Germany has a president as head of state. The president's powers are essentially representative. The current president is Joachim Gauck. The actual political power and head of government is the chancellor ("Bundeskanzler"), who is elected by federal parliament ("Bundestag"). The chancellor is typically elected in the first session of a newly elected Bundestag for the entire legislative period of four years. The parliament can only force the chancellor to resign in a constructive motion of no-confidence, if it elects at the same time a new Chancellor. The current chancellor is Dr. Angela Merkel. The current government is a center-right coalition between the Christian Democrats (CDU/CSU) and the Free Democrats (FDP).http://www.foxnews.com/story/0,2933,569386,00.html Legislative Branch Germany has a bicameral system with a federal parliament ("Bundestag") and a representation of the states ("Bundesrat"). The members of Bundestag in elected every four years, using a personalized proportional system. The members of the Bundesrat are representatives of the state governments, and the delegations of each state are required to vote as a bloc on behalf of their governments. Each delegation has between 3 and 6 members, depending on the size of the represented state. The position of president of the Bundesrat rotates on an annual basis between the prime ministers of the states. Judicative Branch The German constitution provides for an independent jurisdiction. The highest appeals court in Germany is the Federal Court of Justice ("Bundesgerichtshof"), which is seated in the Southwestern city of Karlsruhe. Members of the Federal court are elected by a committee, with 16 delegates from the states, one from each state, appointed by the state governments, and 16 delegates appointed by the federal parliament. The Federal Constitutional Court ("Bundesverfassungsgericht") is the highest court to review decisions and acts by the executive and legislative branches of government. It can be called to determine whether public acts are unconstitutional and can render them ineffective if they are not. This court is also seated in city of Karlsruhe, and it members are elected by the Bundesrat and Bundestag, and need a 2/3 majority in each. Political Parties Christian Democratic Union/Christian Social Union (CDU/CSU) An important aspect of postwar German politics was the emergence of a moderate, ecumenical Christian party--the Christian Democratic Union (CDU)--operating in alliance with a related Bavarian party, the Christian Social Union (CSU). Although each party maintains its own structure, the two form a common caucus in the Bundestag and do not run opposing campaigns. The CDU/CSU has adherents among Catholics, Protestants, rural interests, and members of all economic classes. It is generally conservative on economic and social policy and more identified with the Roman Catholic and Protestant churches. Social Democratic Party (SPD) The SPD is one of the oldest organized political parties in the world. It originally advocated Marxist principles, but in the 1959 Godesberg Program abandoned the concept of a "class party" while continuing to stress social welfare programs. Under the leadership of Gerhard Schroeder, the SPD-Greens government implemented in 2003 the centrist Agenda 2010 reforms, designed to modernize the country's social system and labor market. The SPD has a powerful base in the bigger cities and industrialized states. Free Democratic Party (FDP) The FDP has traditionally been composed mainly of middle and upper class Protestants who consider themselves heirs to the European liberal tradition. It supports free trade and reducing the role of the state in economic policy. It is libertarian on social issues. The party has participated in all but three postwar federal governments but has not been in federal government since 1998. The Communist Left The PDS (for 'Partei des demokratischen Sozialismus'; "Party of Democratic Socialism", the renamed communist party of the former East Germany, and follow-up of the SED) and the WASG (for 'Wahlalternative Arbeit und Soziale Gerechtigkeit'; "Voting alternative work and social justice") composed of west-German leftists) merged in June 2007 to form a party simply known as "The Left." The party's foreign policy is largely shaped by its rigid opposition to foreign military deployments, for example in Afghanistan, and insists on an immediate pull-out. On domestic policy, the party opposes economic and social reforms, such as Hartz IV, which aim to increase free markets and reduce unemployment benefits. The Left proposes to weaken the free market system with a new orientation to democratic socialist principles. The Left also experienced a lot of criticism due to its communist wing, the 'communist platform' which makes up 4.4% of the national vote, an insufficient total to clear the 5 percent hurdle. German Culture.com; Electoral System of Germany (next to last paragraph Alliance 90/Greens In the late 1970s, environmentalists organized politically as the Greens. Opposition to nuclear power, military power, and certain aspects of highly industrialized society were principal campaign issues. In the December 1990 all-German elections, the Greens merged with the Eastern German Alliance 90, a loose grouping of civil rights activists with diverse political views. The Greens joined a federal government for the first time in 1998, forming a coalition with the SPD. Other parties Because of the instability caused by the need for multi-party coalitions in the Weimar Republic, Germany's Basic Law today requires parties reach 5% of the vote to win seats in the Bundestag. In addition to those parties that won representation in the Bundestag in 2005, a variety of minor parties won a cumulative 2.7% of the vote, down from 3.0% in 2002. Several other parties were on the ballot in one or more states but did not qualify for representation in the federal Bundestag. Recent Polls polls indicate a rising popularity of the German Pirate Party. With results as high as 10% it is possible for the Pirate Party to be a part of the next Bundestag.http://www.wahlrecht.de/umfragen/index.htm Principal Government Officials *President--Joachim Gauck *President of the Bundestag--Norbert Lammert (CDU) *Chancellor--Angela Merkel (CDU) *Vice Chancellor and Minister of Economics and Technology--Philipp Rösler (FDP) *Minister of Defense--Thomas de Maizière (CDU) *Minister of Finance--Wolfgang Schäuble (CDU) *Minister of Interior--Hans-Peter Friedrich (CSU) *Minister of Labor and Social Affairs--Ursula von der Leyen (CDU) *Minister of Justice--Sabine Leutheuser-Schnarrenberger (FDP) *Minister of Minister of Foreign Affairs--Guido Westerwelle (FDP) *Minister of Food, Agriculture and Consumer Protection--Ilse Aigner (CSU) *Minister for Family Affairs, Senior Citizens, Women and Youth--Kristina Schröder (CDU) *Minister of Health--Daniel Bahr (FDP) *Minister of Transport, Building and Urban Affairs--Peter Ramsauer (CSU) *Minister for the Environment, Nature Conservation and Nuclear Safety--Norbert Röttgen (CDU) *Minister of Education and Research--Annette Schavan (CDU) *Minister for Economic Cooperation and Development--Dirk Niebel (FDP) *Head of the Federal Chancellery and Minister for Special Tasks--Ronald Pofalla (CDU) Foreign Relations Germany continues to emphasize close ties with the United States, membership in NATO, and the "deepening" of integration among current members of the EU. The Federal Republic of Germany took part in all of the joint postwar efforts aimed at closer political, economic, and defense cooperation among the countries of western Europe. Germany has been a large net contributor to the EU budget. Germany also is a strong supporter of the United Nations and of the Organization for Security and Cooperation in Europe (OSCE). During the postwar era, the Federal Republic of Germany also sought to improve its relationship with the countries of eastern Europe, first establishing trade agreements and, subsequently, diplomatic relations. With unification, German relations with the new democracies in central and eastern Europe intensified. On November 14, 1990, Germany and Poland signed a treaty confirming the Oder-Neisse border. They also concluded a cooperation treaty on June 17, 1991. Germany concluded four treaties with the Soviet Union covering the overall bilateral relationship, economic relations, the withdrawal of Soviet troops from the territory of the former G.D.R., and German support for those troops. Russia accepted obligations under these treaties as successor to the Soviet Union. Germany continues to be active economically in the states of central and eastern Europe and to actively support the development of democratic institutions, bilaterally and through the EU. Relations with the United States U.S.-German relations have been a focal point of American involvement in Europe since the end of World War II. Germany stands at the center of European affairs and is a key partner in U.S. relations with Europeans in NATO and the European Union. German-American ties extend back to the colonial era. More than 7 million Germans have immigrated over the last three centuries, and today nearly a quarter of U.S. citizens claim German ancestry. In recognition of this heritage and the importance of modern-day U.S.-German ties, the U.S. President annually has proclaimed October 6, the date the first German immigrants arrived in 1623, to be "German-American Day." U.S. policy toward Germany remains the preservation and consolidation of a close and vital relationship with Germany, not only as friends and trading partners, but also as allies sharing common institutions. During the 45 years in which Germany was divided, the U.S. role in Berlin and the large American military presence in West Germany served as symbols of the U.S. commitment to preserving peace and security in Europe. Since German unification, the U.S. commitment to these goals has not changed. The U.S. made significant reductions in its troop levels in Germany after the Cold War ended, and, on July 12, 1994, President Clinton "cased the colors" at the Berlin Brigade's deactivation ceremony. The U.S., however, continues to recognize that the security and prosperity of the United States and Germany significantly depend on each other. As allies in NATO, the United States and Germany work side by side to maintain peace and freedom. This unity and resolve made possible the successful conclusion of the 1987 U.S.-U.S.S.R. Intermediate-Range Nuclear Forces Treaty (INF), the Two-plus-Four process--which led to the Final Settlement Treaty--and the November 1990 Conventional Armed Forces in Europe (CFE) Treaty. More recently, the two allies have cooperated closely in peacekeeping efforts in the Balkans and have worked together to encourage the evolution of open and democratic states throughout central and eastern Europe. Germany is also a strong contributor to our common effort to secure peace and stability in Afghanistan, contributing almost 3,000 troops to the NATO ISAF mission. Following the September 11, 2001, attacks on the World Trade Center in New York City and the Pentagon in Washington, DC, Germany has been a reliable U.S. ally in the campaign against terrorism. As two of the world's leading trading nations, the United States and Germany share a common, deep-seated commitment to an open and expanding world economy. Personal ties between the United States and Germany extend beyond immigration to include intensive foreign exchange programs, booming tourism in both directions, and the presence in Germany of large numbers of American military personnel and their dependents. The United States and Germany have built a solid foundation of bilateral cooperation in a relationship that has changed significantly over nearly six decades. The historic unification of Germany and the role the United States played in that process have served to strengthen ties between the two countries. German-American political, economic, and security relationships continue to be based on close consultation and coordination at the most senior levels. High-level visits take place frequently, and the United States and Germany cooperate actively in international forums. War on Terror Germany currently contributes troops to the NATO-led ISAF operation in Afghanistan, but did not support the invasion of Iraq. German military participates in NATO Force Protection Program, protecting US military bases located in Germany. Libya Libyan uprising 2011 Germany’s Defense Minister Thomas de Maziere has criticized NATO’s controversial military operation in Libya and lack of foresight when it comes to intervening in the North African country. http://2012indyinfo.wordpress.com/2011/06/19/presstv-germany-slams-nato-mission-in-libya/ Economy Germany is the world's third-largest economy and the largest in Europe. From the 1948 currency reform until the early 1970s, West Germany experienced almost continuous economic expansion. Real gross domestic product (GDP) growth slowed down, and even declined, from the mid-1970s through the recession of the early 1980s. The economy then experienced 8 consecutive years of growth that ended with a downturn beginning in late 1992. Since unification, Germany has seen annual average real growth of only about 1.5% and stubbornly high unemployment. In 2006, Germany had its best year since 2000 with 2.7% growth; for 2007, growth was at 2.5% despite a 3 percentage point VAT hike at the beginning of the year. The government forecasts 1.7% growth in GDP for 2008. Unemployment in 2007 dropped to an annualized average of 9.0% nationwide, but it is still significantly higher--15.1%--in the German states that make up the former East Germany. Germans often describe their economic system as a "social market economy." The German Government provides an extensive array of social services. The state intervenes in the economy by providing subsidies to selected sectors and by owning some segments of the economy, while promoting competition and free enterprise. The government has restructured the railroad system on a corporate basis, privatized the national airline, and is privatizing telecommunications and postal services. The German economy is heavily export-oriented, with exports accounting for more than one-third of national output. As a result, exports traditionally have been a key element in German macroeconomic expansion, accounting for over half of the economic growth in recent years. Germany is a strong advocate of closer European economic integration, and its economic and commercial policies are increasingly determined within the European Union (EU). Germany uses the common European currency, the euro, and the European Central Bank sets monetary policy. In the early-mid 2000s, Germany adopted a complex set of labor/social welfare reforms to overcome structural weaknesses of the German welfare state and to create policies more conductive to employment. Defying a skeptical German public, the coalition government of Chancellor Angela Merkel initiated additional reform measures, such as the gradual increase in the mandatory retirement age from 65 to 67--a move that would add 2.5 million to the workforce by 2030. Subsequently, however, there has been active political debate and some rollback of these labor reforms; most notably the government decided to extend the payment period of unemployment benefits to older workers in early 2008. Fifteen years after reunification (October 3, 1990), Germany had made great progress in raising the standard of living in eastern Germany, introducing a market economy and improving its infrastructure. At the same time, the process of convergence between east and west is taking longer than originally expected and, on some measures, has stagnated since the mid-1990s. Eastern economic growth rates have been lower than in the west in recent years, unemployment is twice as high, prompting many skilled easterners to seek work in the west, and productivity continues to lag. Eastern consumption levels are dependent on public net financial transfers from west to east totaling about $13 billion per year. In addition to social assistance payments, the government will extend funds to promote eastern economic development through 2019. The United States is Germany's second-largest trading partner, and U.S.-German trade has continued to grow strongly. Two-way trade in goods totaled $184 billion in 2007. U.S. exports to Germany were $ 71 billion while U.S. imports from Germany were more than $113 billion. At nearly $45 billion, the U.S.'s fifth-largest trade deficit is with Germany. Major U.S. export categories include aircraft, electrical equipment, telecommunications equipment, data processing equipment, and motor vehicles and parts. German export sales are concentrated in metalworks, motor vehicles, machinery, chemicals and heavy electrical equipment. Much bilateral trade is intra-industry or intra-firm. Germany has a liberal foreign investment policy. For 2005, the most recent year for which statistics are available, German investment in the U.S. amounted to 233 billion euros (29 % of all German foreign direct investment, or FDI; the U.S. is the number-one destination for German FDI), while U.S. investment in Germany was 45 billion euros (11.5 % of all FDI invested in Germany; U.S. is third-largest source of FDI in Germany). U.S. firms employ about 510,000 people in Germany; German firms likewise employ about 746,000 people in the United States. Despite persistence of some structural rigidities in the labor market and extensive government regulation, the economy remains strong and internationally competitive. Although production costs are very high, Germany is still an export powerhouse, and unit labor costs have decreased in the last 10 years. Additionally, Germany is strategically placed to take advantage of the rapidly growing central European countries. The current government has addressed some of the country's structural problems, with important tax, social security, and financial sector reforms. *GDP (2007 est.): $3.1 trillion. *Annual growth rate: (2006) 2.7%; (2007) 2.5%. *Per capita income (PPP, 2006): $31,900. *Inflation rate (consumer prices, 2007): 2.2%. *Natural resources: Iron, hard coal, lignite, potash, natural gas. *Agriculture (0.9% of GDP): Products--corn, wheat, potatoes, sugar, beets, barley, hops, viticulture, forestry, fisheries. *Industry (29.1% of GDP): Types--car-making; mechanical, electrical, and precision engineering; chemicals; environmental technology; optics; medical technology; biotech and genetic engineering; nanotechnology; aerospace; logistics. *Trade (2006): Exports--$1.03 trillion: chemicals, motor vehicles, iron and steel products, manufactured goods, electrical products. Major markets--France, U.S., and U.K. Imports--$844 billion: food, petroleum products, manufactured goods, electrical products, motor vehicles, apparel. Major suppliers--France, Netherlands, U.S. The German economy showed substantial improvement in 2007 at 2.5% growth due to the effect of recent economic reforms and strong global economic growth. The export-led recovery is now filtering through to the domestic economy where private consumption has long been at a low level. Crisis of 2008 The worldwide Financial Crisis of 2008 hit Germany in the summer, revealing high risk policies pursued by numerous large banks looking for high rates of return outside Germany. In September the government unveiled a $635-billion bailout package for its floundering banks. Economic growth for 2009 is forecast to be an anemic 0.2%. Automobile manufacturing is a major sector, but the financial crisis caused credit to be harder to obtain; many families postponed purchases. Auto exports fell 10% in October 2008 from October 2007; domestic sales dropped 8%. In contrast 2007 was a record year with production of 12.1 million vehicles and employment of 756,000 workers; an eighth of those jobs were created in the last five years alone. History See German History The states (Bundesländer) and their capitals (In alphabetical order) * Baden-Wuerttemberg: Stuttgart * Bavaria (Bayern): München * Berlin: Berlin * Brandenburg: Potsdam * Bremen: Bremen * Hamburg: Hamburg * Hesse (Hessen): Wiesbaden * Mecklenburg-Vorpommern: Schwerin * Lower Saxony (Niedersachsen): Hannover * North Rhine-Westphalia (Nordrhein-Westfalen): Düsseldorf * Rhineland-Palatinate (Rheinland-Pfalz): Mainz * Saarland: Saarbrücken * Saxony (Sachsen): Dresden * Saxony-Anhalt (Sachsen-Anhalt): Magdeburg * Sleswick-Holsatia (Schleswig-Holstein): Kiel * Thuringia (Thüringen): Erfurt Famous Germans Further reading * Schafers, Bernha, The State of Germany Atlas (1998) excerpt and text search * Schulte-Peevers, Andrea, et al. Lonely Planet Germany (2007) excerpt and text search Since 1990 * Alba, Richard. Peter Schmidt, and Martina Wasmer. Germans or Foreigners?: Attitudes Toward Ethnic Minorities in Post-Reunification Germany (2004) excerpt and text search * Berghahn, Volker Rolf. Modern Germany: society, economy, and politics in the twentieth century (1987) ACLS E-book * Buse, Dieter K. ed. Modern Germany: An Encyclopedia of History, People, and Culture 1871-1990 (2 vol 1998) * Kahn, Charlotte. Ten Years of German Unification: One State, Two Peoples (2000) online edition * Larres, Klaus. Germany Since Unification: The Development of the Berlin Republic (2nd ed. 2001) excerpt and text search Economics and society * Siebert, Horst. The German Economy: Beyond the Social Market (2005) excerpt and text search * Zimmermann, Klaus F. et al. Immigration Policy and the Labor Market: The German Experience and Lessons for Europe (2007) excerpt and text search Politics * Green, Simon, and William E. Paterson. Governance in Contemporary Germany: The Semisovereign State Revisited (2005) excerpt and text search * Hancock, M. Donald, Politics in Europe: An Introduction to the Politics of the United Kingdom, France, Germany, Italy, Sweden (2006) excerpt and text search * Schmidt, Manfred G. Political Institutions in the Federal Republic of Germany (2003) ISBN 0198782594 See also *Prussia *Bavaria *German Painting *Gallery of German Masterpieces External links *Germany Basic Facts. References Sources * source: US State Department Country Study Category:German History Category:Germany Category:NATO members